"Made in China" no longer means "cheap and nasty"

THE Made In China label has become synonymous with cheap fabrics and fast fashion - but that's changing just as quickly as the industry grew.

As the country's economy shifts from one of manufacturing to consumption, the quick and dirty goods so beloved by the West are likely to be made in other countries with lower labour costs.

Meanwhile, China's booming middle class is demanding quality and sophistication, and that could mean a $140 billion payday for the Australian economy, experts predict.

Rich Chinese are now the target customer for any Aussie business, and the transaction works both ways. The nation's newly powerful creators could soon be exporting their ideas straight into your home and wardrobe.

Chinese shoppers spend billions in Australia each year. Stuart McEvoy - The Australian

LABEL FREAKS TO FASHION GEEKS

As their economy has exploded, the Chinese have gained a reputation for being obsessed with designer labels. If it's Prada, Gucci or Dior, it's a status symbol they want in their wardrobe.

But the still fledging market is catching on to what's seen as truly sophisticated worldwide.

Now the demand is for innovation, style and originality, and China is starting to make its name in the fashion business for more than just factories. The industry has tripled in size and is valued at $85 billion.

Vogue China was only established in 2005, and at the time there were no Chinese supermodels. Now the magazine has a monthly print circulation of 1.8 million to American Vogue's 1.2 million, and 30 million unique users online.

Its editor Angelica Cheung says the Chinese consumer is increasingly willing to take risks, whether on an original look or a less well-known designer.

If Aussie businesses are agile enough, that could mean important opportunities. China's middle class have higher disposable incomes than ever, but demand for products is not yet being met.

Alice McCall became the first Australian designer to open their own boutique in China last year, and our wool industry is looking at how it can offer more than raw material to the rapidly developing country.

But if we are too slow, China's homegrown designers will outstrip the competition domestically and export its own ideas to the world.

Chinese designers like Madame Zhou are exploring new territory, and their ideas are coming to your wardrobe.Supplied

AUSTRALIA'S $140 BILLION BONUS

The growth of China's gross domestic product (GDP) is at six per cent compared to 10 per cent ten years ago, with manufacturing only nominally up while services have dramatically increased.

This has coincided with both rapid urbanisation and industrialisation and a new demand for goods and services from overseas, particularly Australia, according to Helen Sawczak, national CEO with the Australia China Business Council.

"This demand has been fuelled by a growing and relatively affluent middle class in China, which conservative estimates have put at 109 million adults," Ms Sawczak told news.com.au.

"The new middle class in China continues to demand clean, green and safe premium products which includes Australian agribusiness products especially fresh produce, wine, vitamins, health supplements, infant formula. They also want high quality education, property investment opportunities and unique tourism experiences."
Chinese tourists have the potential to make Australians far richer, with 1.4 million visiting in 2016 and spending billions of dollars.

"Some projections have suggested that by 2025, Australia will receive two million tourists per annum which could impact the Australian economy by $140 billion," says Ms Sawczak, who recently produced a report entitled The Long Boom: What China's Rebalancing means for Australia's Future.

"Chinese tourists tend to be avid shoppers when visiting Australia and our report indicates that visitors are more likely to continue buying Australian products after their trip."

POWER COUPLE

The China Australia Free Trade Agreement has now been in place for a year, substantially removing tariffs on a wide range of products and has helped to facilitate more bilateral trade.

Australian manufacturers are hoping to bypass the multi-million dollar daigou trade, which came to public attention in Australia at the peak of last year's baby formula shortage scandal.

Tens of thousands of international grey market traders, now better known by the Chinese term daigou, ship groceries and skincare products to friends and relatives in China - selling goods at a premium of up to 50 per cent and making as much as $100,000 a year.

Competition to capture China's lucrative market is fierce. The Chinese may see Australia as a destination for food and wine, but it is not as synonymous with premium fashion.

But there is an opening. Li Zhang, project director of the Australian Lifestyle Expo, told Ragtrader earlier this year:

"Australian brands are seen as healthy, green, organic, natural, environmentally friendly and high quality, therefore their willingness to pay is pretty high."

The large market could be vital for Australian businesses looking to grow, with Shanghai alone matching our population of 24 million.